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STF sets thesis: ITBI immunity on capital contributions does not depend on real-estate activity

The Supreme Court (STF) concluded the judgment of Extraordinary Appeal 1.495.108 (*Tema* 1.348 of *repercussão geral*, the constitutional-relevance filter for extraordinary appeals) and held, by majority, that the immunity from ITBI (the municipal real-estate transfer tax) on capital contributions does not depend on the company’s main activity. Article 156, § 2, I, of the Constitution excludes the tax on transfers of property or rights incorporated into a company’s assets as capital and on transfers arising from merger, incorporation, spin-off or dissolution, “salvo se, nesses casos, a atividade preponderante do adquirente for a compra e venda desses bens ou direitos, locação de bens imóveis ou arrendamento mercantil” (unless, in those cases, the acquirer’s main activity is real-estate trading, leasing or financial leasing). The dispute was whether that exception also reaches capital contributions.

According to the judgment certificate filed on 20 October, the Court granted the appeal to recognize the immunity regardless of the main activity, including where it consists of trading such property or rights, leasing real estate or financial leasing, limited to the amount of share capital to be paid in, as decided in *Tema* 796, and preserved the municipalities’ ability to show sham or fraud against the law. The thesis set is: “A imunidade tributária do ITBI, prevista no art. 156, § 2º, I, na realização do capital social mediante integralização de bens e valores, é incondicionada e, portanto, indiferente a atividade preponderantemente imobiliária, ressalvada eventual prática de simulação ou fraude à lei com o objetivo de usufruir indevidamente da imunidade tributária em questão”. Justices Gilmar Mendes and Flávio Dino dissented; they would have dismissed the appeal and proposed that the immunity does not reach capital contributions when the acquirer’s main activity is real estate.

Under the thesis, asset-holding companies and real-estate companies may contribute real estate to capital without ITBI up to the amount of subscribed capital, with effects on corporate reorganizations, succession planning and municipal assessments based solely on the acquirer’s main activity. The portion of the property’s value exceeding the capital paid in remains taxable, and municipalities retain the possibility of showing, case by case, sham or fraud against the law. For municipal tax authorities, the effect reaches pending assessments and collections based on the constitutional exception, now examined in light of a precedent of mandatory observance.

Publication of the full decision and any motions for clarification remain pending; the judgment certificate records no modulation of effects, and the reach of the anti-abuse reservation, that is, which situations amount to sham or fraud in capital contributions, will depend on case-by-case application.